This week the earnings season really takes off  as more than 230 companies are scheduled to report their third quarter results. Of all the earnings seasons this Autumn one IMO can be the hardest to judge what the reactions will be. In many years I have found it easier to just not hold stocks overnight during this time and resume when the season comes to a close. We are entering the strongest time of the year from now until spring and perhaps the market pullback we have been seeing will turn out to just be a good set up in which to rally from.  In reviewing the charts you will see that some supports have been broken but they could recover if they do so very soon. Stocks in general are not in good shape and it is much harder to find decent looking long side charts than it has been in many months. Gold has been pulling pack shifting the gold miners ETF to sell and silver is just barley holing some short term support.  The calendar is on our side but the charts need a lot of work. There have been some improving economic reports lately with less foreclosures and expanding home prices and even the consumer sentiment index came in at 78.3 in September, notably higher than the 74.3 recorded for August and its highest level since May. Beside earnings starting - on Monday we hear about  September retail sales, retail sales ex-auto, and the October Empire Manufacturing Index will all be reported at 8:30 ET. In addition, August  business inventories will be released at 10:00 ET.

Before we get to the charts - some music.

Mark Knopfler is one of the most respected fingerstyle guitarists of the modern rock era and a  four-time Grammy Award winner. He and his band Dire Straits in 1985 released what became their  biggest studio album by far  "Brothers in Arms". It became an international blockbuster which has now sold more than 30 million copies worldwide. If you wan t to see   Mark Knopfle live he is now performing live with Bob Dylan with concerts running until  November 21st ending  in Brooklyn, New York. The full schedule is on his website:

 http://www.markknopfler.com/ This song is about the Falklands War, which was going on when Mark wrote the song. The Falklands War was a conflict between Argentina and England over islands off the coast of Argentina that each country claims rights to. The islands are British territories, but in 1982 Argentina tried to reclaim one of the islands. Britain reclaimed their territories, but lost 258 soldiers in the conflict.

First-time claims for U.S. unemployment benefits unexpectedly showed a notable decrease in the week ended October 6th, according to a report released by the Labor Department, with jobless claims falling to a four-year low. The report said initial jobless claims tumbled to 339,000 from the previous week's revised figure of 369,000. The drop surprised economists, who had expected jobless claims to edge up to 370,000 from the 367,000 originally reported for the previous month. With the unexpected decrease, jobless claims fell to the lowest level since a matching number in the week ended February 16th, 2008.

Wholesale inventories rose as expected in August while sales at wholesalers posted the first gain after three consecutive months of decline, according to government data released on Wednesday. Total wholesale inventories advanced 0.5 percent to $487.5 billion, the Commerce Department said. Year-over-year, inventories were up 5.3 percent from August 2011. Sales at wholesalers rose 0.9 percent, the first increase since April. Economists had expected sales to be up by 0.5 percent. Sales gains in August were widespread, with furniture up by 1.1 percent and machinery advancing 0.5 percent. Petroleum sales rose 5.6 percent and auto sales were up by 2 percent.

With the value of exports falling at a much faster rate than the value of imports, the Commerce Department released a report showing that the U.S. trade deficit came in slightly wider than expected in the month of August. The report showed that the trade deficit widened to $44.2 billion in August from a revised $42.5 billion in July. Economists had expected the deficit to widen to $44.0 billion from the $42.0 billion deficit originally reported for the previous month. While the value of exports dropped by 1 percent to $181.3 billion, the value of imports edged down by 0.1 percent to $225.5 billion.

The Labor Department released a report Thursday showing bigger than expected increases in U.S. import and export prices in the month of September. The Labor Department said import prices rose by 1.1 percent in September, matching a revised increase in August. Economists had expected import prices to increase by 0.7 percent, which would have matched the growth originally reported for the previous month.

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1900. Of interest is that the inflation-adjusted Dow has traded within the confines of an extremely long-term upward sloping trend channel over the past 112 years. It is also of interest that the secular bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, while the market action from the inflation-adjusted record high of 1999 to the financial crisis lows of 2009 was severe, the magnitude of this decline was much less than what occurred with the bear markets that concluded in the early 1930s and early 1980s. More recently, the Dow has retraced 89% of the financial crisis bear market with the inflation-adjusted Dow currently trading 15% off its 1999 record high -- a rather dramatic turnaround considering the magnitude of the recent financial crisis. 

This past week's  and month's sectors.

This past week's indices  - 

With three and a half weeks to go to finish the month the charts still could end the month on the positive side. At the moment however they demonstrate weakness especially so for the NASDAQ which now sports a bearish engulfing candle. The S&P 500 is still above horizontal support though the others are below.

Starting on October 5 the drop this week was steadily down until a rally on Thursday which took the indices only to their center Bollinger bands with a drop yet again to the lower once. Prices made new lows, though RSI did not so at the moment that is a bit of positive divergence. 

The Dow longer-term chart shows the recent high came within 100 points or so to the measured move we have shown previously. Prices have now returned to the 50 day EMA and this horizontal support area. 

This weekly chart shows the 2% drop for the Dow this week and interesting just at support on lower volume. 

In this daily view of the Dow it did close on Friday just slightly below this parallel channel which would be acceptable if it rallies from here by Monday. If not, it could easily drop down to the next Fibonacci level there 13,050. 

The red arrows on the RSI in this chart are from the 60 min. timeframe and the last one was when RSI dropped below 70 near the high of the week. Here showing our short term projection levels based on the move shown with the dotted blue lines. This shows possible short term support at the 161.8% projection at 13,191. There was a small bounce and if it holds that on the opening on Sunday we could start moving back up. 

The transports were basically unchanged for the week closing just a bit under the 50 week EMA. 

The NASDAQ summation index had shifted to sell in late September and remains so now. 

This is a longer-term view of the NASDAQ new highs moving average. It dropped  sharply this week though  it is still  in decent shape closing a bit above the midrange we have seen this year. 

This closer view of the moving average of new highs in blue shows a possible support line in green just below. 

For the week the NASDAQ was down almost 3% and it is at some possible horizontal support, though if that is lost it could come down to test the lower trendline. 

The 60 min. chart shows that the technical were very closely watched and the close on Friday was within pennies of closes in late August and early September from where reversals developed. 

The NASDAQ 100 futures dropped below support and the 38.2% retrace of the move shown and they have additional support at the 50% retracement level not far below. 

The NASDAQ 100 ETF mechanical chart had shifted to sell in late September and remains. 

The volatility index moved up 1 point from last week closing just over 16. 

The semiconductor index which has been weak lost over 4% this week closing with a bearish candle. 

Google has surprisingly remained very bullish during this market decline and still remains over the 161.8% Fibonacci projection level. If that is lost it could easily drop the 40 points down to the 127.2% level. RSI on this timeframe chart has dropped just a bit below 70. 

If the market wasn't so week on Friday Amazon may have had a decent bounce from this trendline. You can see that the midpoint of the trendline could be lowered to that second candle in which case the close was right on the trendline. Meanwhile RSI on the daily chart is at 40. Additional weakness could bring it back down to test the breakout area and the current 38.2% retrace at $233. 

And here another trendline in that for Apple as it closed just over it, but under the 38.2% retracement level. It has further support near the 50% retracement at about $613. 

While we are here with tech stocks - look what YouTube has done with  pages of Oracle.  Fantastic -  I think Google has a great idea here and am certain we will see many more companies have pages like these.  Check out their tabs too.

OracleOpenWorld

The top of the chart is the NYSE with a close just at support from the spring highs. The moving average of number of new highs minus new lows dropped but remained slightly above this previously broken bull flag trendline. 

Still 57% of all stocks on the NYSE are trading over their 50 day moving average. 

The S&P 500 lazy chart is still 37 points above its 20 week moving average signal line. 

The weekly chart is similar to the Dow in that even though it lost over 2% it closed still above horizontal support. 

We have been watching this bearish wedge for a few weeks and this is the week it broke below for a sell as it  also dropped below both the 13 day and 34 day EMA's. The April high of 1422 may provide some support. 

In this daily view in a parallel channel it closed just at the lower channel line and it could be just a test of that breakout level. 

In the 60 min. view we have been showing it clearly dropped below the parallel channel, but has two horizontal support levels. Shown with dotted lines. 

You can draw a descending parallel channel as well and these lines can be watch for support and resistance. 

The 13/34 EM a is on a 15 min. chart,  useful for short term trading signals and the sell here came at the red arrow and remains so now. 

The mechanical signal chart from our stockcharts public page captured 20+ points move down, a whipsaw up and went to e sell again at the end of the week. 

The ultra short for the S&P 500 had an EMA crossover just as it went above the trendline for a buy. 

The Russell 2000 small caps tried to stay above support and the 50 day EMA but on Friday fell below and may be headed to that 815 support area 

In this daily view we see that support and note it is also the 38.2% retracement level. 

The 60 min. Russell 2000 held this horizontal area on the close this week. If a rally resumes watch the upper trendline for a by on a break over it. 

The 3X ETF for the Russell 2000 closed just above the 78.6% retracement level as it was quite weak during the week. 

30 year treasury bond prices went up slightly this week and though not drawn you can see they are at and descending trendline area. 

J.P. Morgan Chase reported earnings that beat expectations on Friday and ran up a bit but closed 1% loss for the day. Wells Fargo had mixed earnings and the Bank of America and Morgan Stanley fell on Friday as the banking index dropped 2.4% and with  increased volume it could be heading to test the $49 previous support area, lower Bollinger band and 50 day moving average EMA. 

In this longer-term view we also see a trendline at that level. 

And here we see the weakest candle on the retail sector than we have seen since May. In those days we had reversals in the following week, it could happen again though RSI has just gone under 70 and may need a lower before a turn. 

The Dow Jones world stock index had been down one week up tee week and now down again, so it also may continue lower. 

The FTSE had a similar pattern though this week it did not lose all its gains from the previous week, dropping only 1%. It still has a positive MACD and histogram. 

The Canadian Venture exchange lost just under 3% this week. The was on lower volume, as gold declined. 

The Shanghai stock exchange was up about 1% back to that horizontal red line resistance. 

Our commodity tracking ETF bounced at the 50 week EMA and was up 1% for the week on much lower volume. 

Crude oil gained a bit less than 2% for the week on decent volume. It remains  over its 20 week moving average and under its 50 week EMA. 

Crude oil futures still has the $94 resistance overhead. 

This parallel channel for natural gas was a major reason for the first buy at $2.23 then eventually was stopped out and the bottom buy at $1.90 on a retest of that trendline. This week it reached its medium term objective to the top of that channel and after some consolidation and perhaps additional pullback, another level of resistance would be its 200 week EMA in red. The MACD is just now crossing back over it centerline the RSI is approaching the 70 level and the Williams indicator on top nearing the 20 line. One of the things that  made this trade so fantastic was it as it is not a company one did not have to worry about surprise earnings announcements or corporate scandals. While this spot price almost doubled the 2-X and 3-X ETF's have done much better. Short term it has really moved though longer term even a return to the October 2011 is again almost another double.

From our chart sharing page  this week we hit the short term 127.2% and pulled back into this bullish flag and if it holds look to the short term 161.8% which coincides with the longer-term 127.2%. 

This is just a closer view showing the breakout from the triangle, the movement into a bull flag and then the breakout from that afterwards. 

The standard ETF for natural gas at its initial a breakout buy under 15 at the trendline break in April followed by a sell by late May and a buy again at the trendline break in June and a test of that previous bottom. It has now moved up over the 50 day the the 200 day EMA and it may go back to test it before decisively making a breakout above the horizontal dotted line over the next year or two. You can see it has very good upside potential 

The 3-X ETF for natural gas with its original buy under 15 and its second buy just over 15 closed the week at 41. On Thursday it moved over the $42 horizontal resistance and to the top Bollinger band and then pulled back some on Friday. If there is to the any exhaustion move, or panic move before some consolidation,  look to the top trendline for stronger resistance.

Gold lost 1.6% this week as it had failed to break above horizontal resistance in the previous week. 

The daily gold chart shows some likely support at the horizontal line. 

The GLD chart may also have support at the bottom channel trendline, which is now back inside. 

The gold miners ETF dropped below a 2.5 month long trendline for a sell though is hovering very near the 200 period EMA so it could yet bounce from there. For the long side it would have to be a tight stop or waiting until it moves back over the top trendline. 

Our mechanical chart remains on a sell. 

Silver lost 3% for the week. Like gold it had been unable to break above horizontal resistance and RSI had gone to 70 so it is dropped from there. 

SLV 60 min. chart shows the drop but also note that it is at possible support at the close. 

The mechanical chart is slower to respond and though it was down $0.45 on Friday it remained on a buy. 

Copper was down 2% for the week, but is okay if it stays above its 50 day EMA. 

The euro remains in consolidation mode hanging around the 50 week EMA. 

On the euro futures chart, after a retest of the broken trendline it has still held and remains  bullish as long as it stays above. 

The US dollar monthly closing by its 50 month EMA and above its trendline as well. 

For the week, the dollar actually gained a small amount. 

The dollar futures for December are now trading in a little bull flag, which if broken to the upside is probably not so good for the equities market. 

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Check the updated Earnings Calendar on all overnight holds.

This week's economic calendar for the USA.